Business this week

Target Enterprise

Enterprise Oil's efforts to remain independent stumbled after an offer of £3.5 billion ($5.0 billion) from Shell. Enterprise, Britain's biggest independent exploration company, was thought to be a target for Eni, an Italian oil and gas company; an unsolicited (though undisclosed) approach to Enterprise spurred Shell into action.

Oil prices hit a six-month high as fears mounted over the situation in the Middle East. The impact of mounting violence between Israel and the Palestinians was compounded by Iran and Iraq's threat to cut off oil supplies in support of the Palestinians.

DSM, a Dutch chemicals company, sold its petrochemicals division to Sabic, a government-controlled Saudi Arabian petrochemicals company, for euro2.3 billion ($2.0 billion). The Saudi firm, intent on further acquisitions, has also talked to Italy's Eni regarding its chemicals business.

Andersen fragments

KPMG's hopes of acquiring the bulk of Andersen's non-American business collapsed with the decision of Andersen's Spanish operations to join up with Deloitte & Touche (the Latin American operations may well follow). While KPMG discussed a worldwide link with Andersen, individual units made separate deals with “big five” rivals. KPMG may now join the scramble for the choicest remaining businesses.

Walter Hewlett's determination to undermine a merger between Hewlett-Packard and Compaq Computer cost him his seat on HP's board; he will not be nominated for re-election, bringing to an end board representation from either founding family. His latest move: a lawsuit alleging that HP used “improper means” to secure shareholders' votes in favour of the deal.

Microsoft announced that Rick Belluzo, president and chief operating officer, would leave after little more than a year in the job. Managers of the six main business units will get more control and accountability. The number-three job at the computer giant may remain unfilled.

Xerox, a heavily indebted photocopier company, settled a long-running dispute with America's Securities and Exchange Commission over irregular accounting for leased products. It agreed to change its treatment for revenues amounting to $2 billion and restate accounts between 1997 and 2000. Xerox also paid a penalty of $10m without admitting liability.

Liberty Media joined the club of companies forced to write off the value of acquisitions made during the technology boom. The American company sliced $4.1 billion off the worth of assets, contributing to a loss of $6.2 billion last year. Qwest Communications overshadowed this trifling sum by announcing that it will write off up to $30 billion later this year.

NTT, Japan's biggest telecoms company, revealed that it would write off ¥2 trillion ($15.1 billion) from the value of overseas assets bought when prices and expectations were sky-high. Losses for the year to the end of March will be ¥865 billion.

Low flying

Fairchild Dornier, the world's third-largest regional-jet maker, filed for bankruptcy protection in Germany. The German-American firm will continue its search for a partner—reports have linked it to Boeing. German banks agreed to tide it over with loans underwritten by Bavaria's government, an arrangement that may arouse the interest of the European Commission.

Credit Suisse First Boston said that 15% of its investment bankers, around 300 employees, would go in its latest round of job cuts. For the first time these will include senior bankers. The bank has pledged to save $1 billion in costs this year to shore up profitability.

South African Breweries was reportedly close to a deal to buy America's Miller Brewing from Philip Morris for around $5 billion in cash and shares. SAB would become the world's second-largest brewer after Anheuser Busch.

Rumours bubbled to the surface that Coca-Cola may soon announce a new vanilla-flavoured addition to its fizzy-drink range. The last successful addition to the Coke stable, Cherry Coke, was launched in 1985 at the same time as New Coke, a short-lived and costly mistake for the company.

Perhaps perversely, Taito, a Japanese karaoke-machine maker, said it would join forces with Analog Devices, an American chip maker, to develop karaoke technology that will eventually adjust any singer to pitch perfection. Ending the off-key maundering of drunken crooners will force people to find other embarrassments on a night out.

Stay informed this week and every week

Sign up to receive The Economist's round-up of business and politics each week. These e-mail newsletters are free and will keep you up-to-date on the latest developments around the world. Sign up here.